about/contact
Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from
the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

My
personal website has links to my LinkedIn and Google+ pages and you can send e-mail to david [at] thelayaways [dot] com.

This is fun: I've long joked with friends that -- if you add up all the hours spent practicing, performing, writing songs, recording, mixing, etc. -- many professional musicians are actually earning less then minimum wage for their efforts. Fazo, at the Cynical Musician blog, calculates how many downloads/streams you'd need from various digital stores/music services to earn the equivalent of a minimum-wage salary:

- In the case of Amazon and iTunes single-track downloads, 1,813 units must be sold monthly; 21,750 units a year.

- For CD Baby full album downloads (under the new commission rates), the numbers are: 155 units a month; 1,859 units a year.

- For eMusic single-track downloads, at the rates reported for Q3 2009: 3,392 downloads a month; 40,941 a year.

And Morningstar equities strategist Paul Larson on why he recently dumped the stock of Live Nation Entertainment from one of the portfolios he manages for Morningstar's StockInvestor newsletter. (I work for Morningstar as well, though in a marketing capacity.) It's not available online, so I'm posting the best bits here:

I've always liked Ticketmaster's ticketing business; I figured that any business that could frustrate its customers but still keep them coming back is a business with a competitive advantage. Unfortunately, the merger with Live Nation greatly diluted the attractiveness of the overall company.

First, to get the merger past the antitrust hurdles, the company had to agree to license its ticketing software, providing a potential bridge across the moat of the ticketing business. Yet even if the ticketing business retains its moat (something with decent odds of happening, in my view), Live Nation's other operations are quite unattractive. It owns several concert venues, a business with a high degree of rivalry and modest barriers to entry. (This is almost the polar opposite of International Speedway ISCA, which essentially has mini-monopolies in any given city.) Live Nation is also involved in promoting concerts and managing artists, businesses for which I fail to see a moat. The old Live Nation generated an operating loss in four of the past six years, and the combined entity will also have to deal with roughly $1.5 billion in debt.

In sum, Live Nation is a financially levered firm with a declining moat and a management team that have done a good job destroying value. No thank you!

(Morningstar uses the term "economic moat" to describe how well a company can hold off its competitors.)